Wait…Africa is LESS Risky? The Shocking Truth About Investment Risk

HEC Montréal panel reveals why everything you’ve heard about African investment risk might be wrong

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If you’ve ever thought “Africa is too risky to invest in,” you’re not alone. It’s the most common reason investors avoid African capital markets.

But what if the data tells a completely different story?

At a recent panel discussion at HEC Montréal moderated by Coralie Collignon (C3 Strategies), Professor Gilbert Kofi Adarkwah and BOUM III JR, CEO of Daba Finance, revealed findings that challenge everything conventional wisdom says about African investment risk.

Watch the full panel discussion →

The Numbers Don’t Lie

Here’s the reality from African Development Bank research:

• African infrastructure default risk: 13%
• Latin America: Comparable to Africa
• Eastern Europe: 23%—nearly DOUBLE Africa’s rate

Eastern Europe—considered a “safe” emerging market—carries 10% higher risk than Africa. Yet Africa receives less than 1% of global private equity and venture capital investment.

This disconnect is called the Africa Risk Perception Premium—the gap between belief and reality. And it’s costing billions in missed opportunities.

Why Perception Beats Data

“We know investments carry less risk than other regions,” Professor Adarkwah explained during the panel. “But when we talk with non-African investors, they won’t invest because they believe there’s too much risk. How do we correct this perception?”

The perception creates a cycle: investors believe Africa is risky → less capital flows → limited liquidity reinforces perception.

Breaking this requires strategy—which is what Daba Finance built.

Three Strategies to Bridge the Gap

BOUM III JR outlined Daba’s approach across investor types:

Education for Retail Investors

“We created Daba Academy to train people on investment fundamentals—how to analyze risk and understand if opportunities fit their profile,” BOUM III JR explained.

Notably, 65% of Daba’s clients are first-time investors, starting with as little as $15. This accessibility itself creates impact—bringing opportunities to people previously excluded.

Data for Institutions

“SMEs and institutions want data and analysis. We have research partnerships providing data so entities can use their own investment models and reach favorable conclusions.”

When institutions analyze African investments using familiar frameworks, perception shifts toward reality.

Proof Through Performance

The BRVM (Bourse Régionale des Valeurs Mobilières)—West Africa’s regional exchange—offers compelling proof. Every BRVM company is optimized to pay annual dividends of 5-12%.

“When you enter this market, you know companies operate to pay dividends,” BOUM III JR said. “This reduces risk because companies must generate profit to pay investors.”

The Resilience Paradox

The ironic twist? Constant questioning created stronger markets.

“When you’re told ‘you’re risky,’ the African economic sector develops resilience to prove itself worthy,” BOUM III JR observed. “This creates operational discipline not to lose money.”

The perception of high risk forced African companies to become lower-risk investments than peers in “safer” markets.

Impact + Profit: Not a Trade-off

Professor Adarkwah addressed another misconception: impact investing means sacrificing returns.

“The most important element is: what impact are you seeking?” he explained.

In African markets, you don’t choose between impact and profit. “Companies on the BRVM are calibrated to give you profit,” BOUM III JR noted. “By virtue of existing in their sectors, they impact the societies they serve.”

Invest in a utility providing electricity? You get dividends while supporting infrastructure. Buy bonds from women-led companies? Fixed returns while advancing equality.

Impact happens naturally—not as a tradeoff, but as a feature.

What This Means for You

The panel makes three things clear:

1. Data shows African markets carry comparable or lower risk than other emerging markets

2. The perception gap creates opportunity for informed investors

3. Platforms like Daba now remove traditional barriers—local bank accounts, high minimums, complex processes

From Perception to Action

“We won’t eliminate the perception premium completely,” Professor Adarkwah concluded. “But we can improve the possibility of investing in Africa.”

That improvement starts with education, continues with data, and solidifies through performance.

For diaspora investors especially: build wealth while building economic ties. Stop only sending remittances—invest where capital compounds returns while funding the Africa you want to see.

The numbers are clear. The infrastructure exists. Will you let outdated perceptions cost you the opportunity?

Watch the full panel discussion to hear the complete breakdown of data, strategies, and opportunities in African capital markets.

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Ready to invest? Start with as little as $15 on Daba Finance and join 200,000+ investors in African markets.

Learn free: Daba Academy offers courses on African investing fundamentals.